May 18, 2016 The Skanner Page 9
News
Detroit’s Automakers, Sensing a threat, Embrace Mobility
Dee-Ann Durbin
AP Auto Writer
DEARBORN, Mich. (AP)
— For Detroit, the days of
simply making cars are
over.
Automakers are facing
multiple threats to their
business from nimble
tech firms like Apple and
Uber. In response, car-
makers are reinventing
themselves as “mobility”
companies that can ac-
commodate all the dif-
ferent ways people get
around.
Already this year, Gen-
eral Motors Co. has an-
nounced a long-term al-
liance with ride-hailing
company Lyft and start-
ed a car-sharing service
called Maven. Ford creat-
ed a technology-focused
“
plane-maker Gulfstream
in the mid-1980s. In each
case, the companies sold
those businesses to refo-
cus on car-making.
There’s also the open
question of whether driv-
ers want automakers to
do more than make cars.
Ford CEO Mark Fields is
confident they do.
“It goes back to Henry
Ford and one of his favor-
ite quotes: ‘If I asked peo-
ple what they wanted,
they’d say they wanted a
faster horse,’” Fields told
The Associated Press.
“We want to transform,
fundamentally, the rela-
tionship between an au-
tomaker and a customer.”
Fields adds that the fi-
nancial case is too com-
pelling to ignore. Global
revenue at traditional
of seven days,” she said.
Detroit
carmakers
aren’t the first to offer
mobility services to
compete with the likes
of ZipCar and Uber. Ger-
man automaker Daimler
AG launched Car2Go, a
car-sharing service, in
2008; it now operates in
29 cities in Europe and
North America. BMW
started a New York-based
mobility venture capital
firm in 2011. Toyota has
70 tiny electric cars zip-
ping around Grenoble,
France, as part of its own
car-sharing service.
But after surviving the
recession, Detroit is en-
joying record U.S. sales
and plowing the profits
into mobility experi-
ments.
GM has been the most
After surviving the recession, Detroit is enjoy-
ing record U.S. sales and plowing the profits
into mobility experiments
division based in Silicon
Valley that will invest
in promising transpor-
tation startups. It also
launched FordPass, a
smartphone app that
helps users find parking
or share their cars. Fiat
Chrysler Automobiles is
partnering with Google
to test self-driving soft-
ware in 100 of its mini-
vans.
In congested and ex-
pensive cities, people are
increasingly content to
share cars or summon
rides using their smart-
phones.
In five years, 35 million
people globally will be
using car-sharing ser-
vices, up from 5.8 million
now, according to Boston
Consulting Group. That
means 550,000 fewer
cars sold each year. With-
in another few decades,
fleets of self-driving tax-
is could replace the need
for personal car owner-
ship altogether.
Automakers that don’t
adapt risk being sup-
planted by high-tech
competitors.
“We’re
investing
in
future-proofing,”
says Elena Ford, who
led the development
of FordPass and is the
great-great-granddaugh-
ter of Ford’s founder.
There are dangers.
Making vehicles is com-
plicated and expensive,
and car companies have
stumbled when they’ve
taken on new business-
es. GM bought software
maker Electronic Data
Systems Inc. in 1984 but
sold it 12 years later.
Ford owned Hertz rental
cars but sold it a decade
ago. Chrysler owned air-
automakers totals $2.3
trillion a year, he says;
the transportation busi-
ness, including taxis,
buses and car-sharing, is
worth $5.4 trillion.
Companies are target-
ing people like Shannon
Serenko, 32, who works
at Johnson & Johnson and
lives in downtown Ann
Arbor, Michigan. Paying
for parking, insurance
and gas for a car she
barely uses would be a
hassle, she says.
Instead, she rents a
Chevrolet Volt from Ma-
ven for $42 a day when
she wants to run errands.
“I’d just rather be
spending all that mon-
ey on other things than
parking a car for six out
aggressive of the Detroit
companies. In January,
it invested $500 million
in Lyft and said it will
co-develop a service that
lets customers summon
self-driving cars. Three
months later, it paid a
rumored $1 billion for
Cruise Automation, a
startup that makes au-
tonomous vehicle soft-
ware. Around the same
time, it launched Maven,
a car-sharing service in
Ann Arbor and Chicago.
GM President Dan Am-
mann said that when GM
sees potential value, it
can’t afford to sit back
and see where the mar-
ket heads.
“We believe in speed,”
Ammann said.
AP PHOTO/CARLOS OSORIO, FILE
Carmakers attempt to compete with service-based, tech-centered mobility businesses like Zipcar, Uber
In this Friday, May 6, 2016, file photo, Fiat Chrysler Automobiles Chairman and CEO Sergio Marchionne,
left, shakes hands with Dino Chiodo, president of Unifor Local 444 in front of a 2017 Pacifica minivan
on the Windsor Assembly Plant line, in Windsor, Ontario. Fiat Chrysler and Google announced Tuesday,
May 3, that they will work together to more than double the size of Google’s self-driving vehicle fleet by
adding 100 Chrysler Pacifica minivans. Carmakers are reinventing themselves as “mobility” companies
that can accommodate all the different ways people get around.
So far, Wall Street is on
board. Colin Langan, an
auto analyst with UBS,
said investors under-
stand the need to invest
in new mobility, and ex-
pect companies to spend
hundreds of millions of
dollars a year doing so.
But alarm bells may go
off if they’re routinely
spending more.
“Historically, automak-
ers have not been good
allocators of cash,” Lan-
gan said.
Fiat Chrysler CEO Ser-
gio Marchionne says it’s
dangerous for automak-
ers to place big bets on
one solution. He stresses
that FCA’s partnership
with Google is open-end-
ed and not exclusive.
If the companies decide
to keep working togeth-
er, they will eventually
hammer out details like
licensing fees for the
software.
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